Fears of Peak Fortnite Send Funko Shares Nosediving

Hitching your ride to the popular Fornite — or any hot product for that matter — is not without risk.

Funko, maker of the cute action figurines adorning work desks worldwide, saw its stock plunge 16% on Wednesday. The move followed a dive of 18% on Tuesday.

The market appears to be reacting to favorable beta reviews of Activision Blizzard’s (ATVI) Call of Duty: Black Ops 4. Donning the popular battle royale mode that has made Fornite famous, Call of Duty could prove a threat to the popular gaming franchise.

Funko recently signed a deal with Epic Games to distribute Fortnite dolls this coming holiday season. Shares exploded 81% from Jul. 18 (deal announced) to an all-time high on Sept. 10. So, it’s logical that any perception by the market that Fortnite could lose momentum would hit Funko.

A Funko spokesperson declined to comment. Call of Duty: Black Ops 4 is set for release on Oct. 12.

Hasbro’s new deal to sell a Fornite Monopoly game and Fornite Nerf blasters are unlikely helping sentiment on Funko, either.

To be sure, the market may be over-reacting here.

Funko CEO Brian Mariotti recently told TheStreet the company is gaining “major” shelf space at mass retailers such as Target (TGT) and Walmart (WMT) . Sales trends on Amazon (AMZN) continue to be hot too, said Mariotti, helping to offset the loss of toy retailer Toys ‘R’ Us to bankruptcy.

Funko expects sales to reach $1 billion a year within the next five years. The toy maker has found success in large part powered by a vast portfolio of 11,000 licensed characters.

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